IP Case Law Analysis

March 2, 2012

Litigants defending against patent infringement claims should consider whether raising the issue of invalidity for ineligible subject matter could provide a tool for quick disposition of the litigation.

Overview

The Federal Circuit has added confusion to its claim construction jurisprudence by attempting to reconcile competing claim construction tactics in the recently decided MySpace, Inc. v. GraphOn Corporation case. Furthermore, the role in litigation of determining patent eligibility under 35 U.S.C. 101 is called into question.

Case Background

In this declaratory judgment (DJ) action, GraphOn owned four patents directed to technology enabling users to create, modify, and store database records over a computer network, as might be applicable to posting of content on the internet. MySpace alleged the patents were invalid as anticipated and/or obvious. The district court agreed and granted summary judgment of invalidity to MySpace.

On appeal, the Federal Circuit considered the construction of certain claim terms in concluding, by a 2-1 majority, that the district court had not erred in its determination of invalidity. However, in a divided opinion, the Federal Circuit also addressed, of its own accord, whether the case should have been decided on the grounds of statutory subject matter rather than on the grounds of novelty and obviousness.

Decision Analysis

The Federal Circuit’s opinion is noteworthy for two reasons. First, the court attempted to reconcile seemingly conflicting claim construction protocols from its previous cases. Namely, the court addressed whether the proper construction of claims is based on the claim language itself or whether the specification gives the proper construction.

The court attempted to clarify its claim construction approach, stating that the patent in its entirety must be consulted to determine what the inventor has invented, and the claims must then be consulted to determine whether the inventor has claimed less than what was invented.

Despite its efforts to clarify claim construction, this case appears to represent the first such articulation of the protocol, and is potentially at odds with previous Federal Circuit cases. Thus, whether the articulated protocol will be followed in future cases appears to be in question, adding uncertainty to the court’s claim construction approach.

The Federal Circuit’s opinion is also noteworthy for its treatment regarding patentability under 35 U.S.C. 101. Recent case law relating to the statute has focused on how to apply it, with many of the cases creating significant confusion among the patent community.

Here, the Federal Circuit did not focus on how to apply the statute, but rather whether to apply it at all. Namely, the two person majority adopted the position that 35 U.S.C. 101 is not a gatekeeper and need not be considered in all patent litigation. Instead, judges should have discretion to decide cases under whichever section of the patent statute is applicable, such as novelty or nonobviousness .

By contrast, the dissent adopted the position that patent eligibility must always be considered prior to consideration of whether a patent meets the other criteria of the patent statute. The dissent reasoned that the remaining sections of the patent statute are not sufficient to ensure the quality of issued patents, and that 35 U.S.C. 101 must therefore always be considered as an initial step.

Although the Federal Circuit’s treatment of 35 U.S.C. 101 in this case was dicta, and therefore not binding on future courts, it has potentially outlined a further battleground with respect to patent eligibility—namely, when to apply the statute as opposed to just how to apply the statute.

Takeaways

In view of the Federal Circuit’s treatment of 35 U.S.C. 101, litigants should consider whether raising the issue of patent eligibility may provide a valuable tool for disposing with litigation relatively quickly. Because patent eligibility is a question of law, the issue may be addressed in many circumstances without the need for costly and time-intensive discovery.